You did very simple mistake.
You have open the Recordset here
Set rs = conn.Execute(qry2)
And, again you are opening the same recordset RS here
qry1 = "select * from tblborrowers where tblItem_id=' + itemid + '"
rs.Open qry1, conn
If you want to Open the Rs again, then first Close it. Thats why it saying : Operation is not allowed when the object is open.
rs.Close
qry1 = "select * from tblborrowers where tblItem_id=' + itemid + '"
rs.Open qry1, conn
Or, Use another Recordset.